Development Prospects of Alternative and Small Energy in Russia

Research aim

To identify medium-term and long-term development prospects of alternative energy and requirements of prospect consumers for generation and co-generation equipment of various capacity.  The issue of the outlooks for large-scale production and consumption of fuel cell equipment (FC) has been studied in more detail within the research.

Market research objectives

1. To determine a prospect market of alternative, small energy and fuel cells.
2. To survey the Russian market for current and future distribution of products of Russian and foreign companies manufacturing equipment for alternative and small energy.
3. To formulate technical-and-economic requirements for potentially competitive products in the context of development forecasts for diesel generators, steam-and-gas turbines and similar analogs and prototypes based on conventional technologies of heat energy.

In the course of work the following consumer groups have been surveyed:

• Regional and municipal administrations, EMERCOM, Ministry of Defense, Ministry of the Interior, and Public Health;
• Management companies of apartment buildings, homeowners associations and energy sales companies;
• Management companies of town house estates and individual consumers;
• Major corporate consumers (Russian railways, telecommunication companies, Gasprom, Rosneft, etc.);

And also basic suppliers of power generation equipment.

The market research

    Survey:

• Federal and regional comprehensive and industry strategies and programs;
• Corporate strategies of major consumers;
• Western open market researches into similar topics;
• Development forecasts of alternative energy of national and western authorities and independent centers.
• Interviews among:
• Representatives of scientific circles;
• Governmental and local authorities which have information on the condition and prospects of the alternative energy and equipment market;
• Representatives of organizations which are able to determine independently the energy supply policy (in part of choosing the supplier of generation and co-generation equipment).

The geography of the field marketing research comprised 10 regions: Kursk Oblast; Tver Oblast; Amur Oblast; Republic of Karelia; Nizhegorodskaya Oblast; Samara Oblast; Rostov Oblast; Stavropol Krai; Chelyabinsk Oblast; and Tyumen Oblast.

The basic directions of the research:

• Assessment of the energy development prospects, including alternative, in Russian and in the world, including the assessment of the probability to convert to hydrogen energy;
• Identification of the gas production prospects and use of gas in energy and as fuel for energy plants on fuel cells;
• Determination of possible partners and competitors in the development and introduction of FC based on the company development strategies;
• Determination of target consumers among major corporations;
• Shaping the vision of industry development prospects and FC market.
• Determination of the level of awareness of prospect consumers about new technologies of energy and heat generation;
• Estimation of the current level and opportunity for the development of alternative energy in Russia;
• Formulation of consumer requirements for energy equipment;
• Identification of consumer preferences for concrete manufacturers of products.
• Identification of overall approaches to the determination of potential and prospects of the nascent markets of alternative energy technologies in Russia,
• Determination of factors promoting, limiting or intensifying specific tendencies.

Summary of basic findings

Alternative energy in Russia is now oriented at:

• Small scale consumers,
• Supply of energy plants of low power to the market and systems of emergency power systems;
• Selection of regions for promotion with the remote subjects of energy consumption,
• Development of the information context.

In the medium- and long-term prospect alternative energy in Russia may develop both utmost vigorously and nearly not develop. The determining factors of its development rate will be political decisions first of all taken on the federal level and ambitious capital-intensive business strategies of private market players.

The surveillance marketing research has shown that there is a possible demand for FC with various technical and consumer performances among a wide range of consumers. The FC advantages as compared with conventional power plants will allow them in the event of the organized and system-based company to take their niche on the Russian market of power equipment and reach the level of large-scale production by 2015-2020.

Although the fuel element markets will be fast-growing in prospect of 5-10 years but it at the same time the investments in it will remain highly risky, especially in Russia. The market building speed and the extent of its mass scale in the RF will be connected with the efficient efforts towards creation and promotion of the information context and possibility to maintain interaction both with researchers and FC developers and major consumers, distributors, credit, insurance and leasing companies.